Houston's Sublease Space Falls Below 10M SF
Houston's prolific sublease space fell below 10M SF for the first time since Q4 2015. The amount of sublease space as a percentage of the total available space decreased to 15.4%, compared to 16.8% at this time last month, according to research from NAI Partners.
There is now 9.2M SF of sublease availability, roughly 4% of Houston's total office inventory. Direct available space is nearly 52M SF, for a vacancy rate of 22.5%.
What's behind the drop? Pricing. The average gross rental rate for sublease space in Class-A buildings built in 2014 or newer is $24.17, a 36% drop since the start of the oil downturn in Q3 2014.
Recent major sublease deals include Costello Engineering's 35K SF deal in CityWest Place; Wortham Green's 26K SF; and 25K SF of sublease space absorption at Research Forest Lakeside.